Amazon Awarded Bitcoin-Related Cloud Computing Patent

E-commerce giant Amazon has been awarded a bitcoin-related cloud computing patent that envisions the use of digital currencies as payment for cloud computing services on Amazon Web Services (AWS).

Amazon’s cloud is by far the biggest remote computing service on the market. Market research firm Gartner estimates AWS annual revenue at upwards of $3bn, and it believes Amazon’s cloud has five times the capacity of its next 14 rivals.

The news follow's Amazon's public statements that suggest is not presently interested in accepting digital currencies, despite such suggestions from rivals like eBay.

Earlier this April, Amazon’s payments head Tom Taylor revealed that the company has no immediate plans to "engage bitcoin".

USPTO Patent 8,719,131

The Amazon patent was granted by the US Patent and Trademark Office (USPTO) as Patent 8,719,131. It was filed on 29th March 2012, but has recently surfaced online.

The patent involves allocating financial risk and reward in a multi-tenant environment.

The abstract reads:

"Multi-tenant resources can be funded using payment submitted with requests for those resources, such that the resources do not need to be associated with a specific user account.

A resource can be allocated and available as long as payment has been provided. If a user wants the resource to be available for additional processing, for example, the user can submit another request with additional funding."

The patent goes on to specify how funding would work in more detail, stating:

"The funding can come in the form of donations from any user, or in the form of investments where the investor expects some return on the investment in the form of revenue, visibility, or other such compensation.

One or more management components can track funding for various resources, can accept and select bids for period of sponsorship, and can manage various donation models.”

Bitcoin funding

The system requires a source of funding, such as a digital cash payment upon request. Bitcoin is just one form of payment described in the patent description.

The patent reads:

"Various types of digital cash, electronic money or crypto-currency can be used, such as bitcoins provided by the Bitcoin P2P Currency System."

Speed is essential, for example, as a user might request access to a server for just two hours and pay for it digitally.

The patent could be described as enabling an 'à la carte' approach to cloud computing – take what you need for as long as you need it, with no subscription or long-term obligation, no need to plan ahead.

Everything as a Service

Cloud computing revolves around several basic models, such as Infrastructure as a service (IaaS), Software as a service (SaaS) and Platform as a Service (PaaS), and there are a number of variations and hybrid business models.

Cloud offers a lot of flexibility in terms of hardware, but flexibility in terms of paying for cloud services is another thing. Amazon’s patent, with or without bitcoin in the mix, aims to deliver pay-per-use resource allocation, maximising efficiency and reducing costs for the end user.

While this does not make much of a difference for businesses, it could have implications for consumer-oriented cloud services.